ACCSPRING18_ONLINEVER

INSURANCE
Exemptions
The IDD applies to any person (natural or legal) who
is established within the EU and sells insurance
and reinsurance products. However, Article 1 of
the IDD specifically excludes ancillary insurance
intermediaries if the following conditions are met:
a. The insurance is complimentary to the good
or service supplied by a provider, where such
insurance covers:
(i) risk of breakdown, loss of, or damage to,
the good or the non-use of the service
supplied by that provider; or
(ii) damage to, or loss of, baggage and other
risks linked to travel booked with that
provider;
b. The amount of the premium paid for the
insurance product does not exceed EUR 600
calculated on a pro-rata annual basis;
c. By way of derogation from point (b), where
the insurance is complementary to a service
referred to in point (a) and the duration of that
service is equal to, or less than, three months,
the amount of the premium paid per person
does not exceed EUR 200.
What do we know so far?
Although it is difficult to calculate the exact amounts
at this stage, the changes brought about by the
new Directive will bring higher costs for insurance
distributors, which eventually will be passed on to
policyholders. Moreover, both governments and
respective regulatory authorities are expected to
incur increased costs as a result of increased checks
and controls.
The new Directive is expected to bring the following
benefits to the market:
• An improved information distribution which
helps potential policyholders to make better
informed decisions on the insurance products
presented to them;
• Increased transparency on both prices and costs
for insurance products. The aim of the IDD is to
provide the customer with clear information
about whether the insurance distributor has
personal economic incentives to sell one
product from the other; and
• Rules of transparency and the overall business
conduct will prevent customers from obtaining
products that do not meet their needs.
The IDD does not restrict a specific business
model for the sale of insurance products. The new
Directive will bring about new concepts of which the
requirements are not yet clear, both at a local and
EU level. The introduction of these requirements
will probably have a huge impact on the insurance
market, given that significant changes are expected
in the day-to-day business of insurance distributors.
Further discussions are expected in the coming days,
together with additional guidelines and rules to be
released by the European Commission.
52 Spring 2018